Digital push will help startups try new things: Steve Ellis

"The primacy of digital relationship is going to overtake the primacy of human relationship, certainly for the section of the customers which is likely to grow in the next three decades," says Ellis. (Photo: Twitter)

The digital infrastructure that the Indian government is building will assist startups to try new things, says Steve Ellis, executive vice-president at Wells Fargo.

Ellis heads the American banking and financial giant's innovation wing focused on bringing in new and emerging technologies within the organisation. In an interview with ET, he also spoke about the need for adoption of new technologies, future strategy of the Wells Fargo startup accelerator, and emerging startup ecosystem in India. Excerpts:

How does Wells Fargo look at innovation in the Indian context? It goes back to 30 years where we saw new kinds of tools which could add value to our customers.

We looked at them, evaluated and investigated them to find out new ways to drive value to our customers. We did the first internet bank in the US in 1995 and the first payments in the internet in the same year. The focus of our innovation was to look at big transformative technologies, and not continuous improvement or iterative development.

Things like biometrics, moving from user IDs and passwords to voice, fingerprint or eye print, AI (artificial intelligence), APIs (application programming interfaces), and things like that interest us. We formed a group a couple of years ago and that was charted to be the catalyst for transformative change. Part of the impact of the work the government is doing by digital identities and laying an infrastructure seems like it's driving some of the startups coming out of India.

What is the positioning of Wells Fargo Accelerator? The accelerator programme started three years ago and was always open to everybody. We looked at over 1,600 companies and we only let 17 in so far.We are very selective. Partly because we could go after 100 ideas, but we can't be good at 100 things.

We'd probably be good at a dozen things. We have two application period a year. There is a small group which takes a cursory look and a cross enterprise committee who vote on it. We might be a bit more aggressive going forward, partly because we are seeing many interesting companies. We provide business partners to work with for the companies (startups) sometimes for 2-3 years to really drive value. The measurement of success for us is not return on investment (RoI), but what makes a difference for our customers. We are not in it for the return.

What's your reading of the Indian startup ecosystem? The Indian startup ecosystem is new and is a maturing ecosystem, not like Silicon Valley. I really think what we have seen in the last 10 years is the ubiquity of mobile, big data, cloud computing, etc. The barriers to entry are small. If you have a good idea, you can spin something up and give it a go without taking it the long run. I really think that's hitting here... The ecosystem is maturing. The digital infrastructure that the Indian government is building now will be beneficial to startups to try new things. You've got a population who are digitally inclined, which honestly doesn't exist in the US.

Banking is going through a fundamental shift with talks of no physical presence for banks. Where does your future and the emerging trends meet? Great question! We always try to think about the customer. It is important to remember our 70 million consumers and four million businesses. There is a lot of diversity there. Some people like going into a bank branch, some like mobile, and some don't. So you are really listening to your customer when you are deciding on how to do that. I think what happened is... you saw their branches, call centres and ATMs. Then the internet came and you kind of plugged it into that physical distribution, and then you plug mobile into that.

What we are starting to see today are people who grew up with these things. Kids who are digital natives expect mobile banking. The customers of tomorrow are the 12 and the 18-year olds. The primacy of digital relationship is going to overtake the primacy of human relationship, certainly for the section of the customers which is likely to grow in the next three decades.

The thrust of innovation is more focused on digital.

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